Explaining a minimum llc tax

What this means for you

It is billed separately from the annual report fee, so paying one does not satisfy the other. Look at the state's own description below to see how the amount is set and when it is due, and put both dates on the calendar rather than assuming they match.

The tax matters most for owners who run several small LLCs. Each company owes its own minimum, so three dormant LLCs cost three times as much. Closing the ones you no longer use is the cleanest way to stop the charges.

The picture across states

Here are the 3 states that charge this tax, shown in the state's own description. Check the wording carefully: some states tie the amount to the LLC's type or its revenue, while others set a flat figure, and the due date is not always the same as the annual report's. Missing it can bring penalties, so note both dates.

• California: $800 a year minimum LLC tax to the Franchise Tax Board (Form FTB 3522), separate from the Statement of Information.
• Kentucky: Limited Liability Entity Tax: a $175 minimum each year to the Department of Revenue.
• Rhode Island: $400 a year minimum tax to the Division of Taxation (Form RI-1065), owed whether or not the LLC makes a profit.

Next steps

Pages that rely on it: LLC formation rules by state, State-by-state registered agents, Out-of-state registration by state.